Financial summary for Q3 FY23 ended June 2023:
- EBITDA excluding special items US$106 million (Q3 FY22 US$371 million)
- Net debt of US$1,176 million (Q3 FY22 US$1,530 million)
- Profit for the period US$40 million (Q3 FY22 US$199 million)
- EPS excluding special items 5 US Cents (Q3 FY22 39 US Cents)
Sappi announces results for the third financial quarter of 2023
Commenting on the group’s results, Sappi Chief Executive Officer Steve Binnie said: “Following the record profitability achieved last year, the group faced persistent challenges in the global economy and encountered ongoing weakness in paper and pulp markets. Specifically, the paper businesses experienced a significant downstream destocking cycle. Customers reduced their inventories in anticipation of lower prices, thereby affecting demand. In response, we proactively curtailed excess production in Europe and North America, implemented various cost-saving initiatives across our operations, and applied measures to optimise working capital. The profitability of the South African business was more stable, bolstered by the dissolving pulp business.
Sappi delivered an EBITDA excluding special items of US$106 million against a backdrop of a challenging global economy and significantly weaker paper and pulp markets. Despite the difficult economic environment and the share buyback of US$22 million during the quarter, further progress was made towards our net debt target of US$1 billion. Net debt decreased by US$49 million from the prior quarter to US$1,176 million. A stronger Euro/US Dollar exchange rate resulted in Euro-denominated debt being converted at a higher rate and negatively impacted net debt by US$105 million for the year to date.”
Looking forward, Binnie stated: “Despite the challenging economic environment, we generated cash in the quarter and liquidity in the group remains strong. We are committed to our strategy to reduce exposure to graphic paper markets while investing for growth in renewable packaging, dissolving pulp and biomaterials. Despite the slow recovery of paper demand and notwithstanding continued margin pressure in all of our market segments, EBITDA in the fourth quarter is likely to be marginally above that of the third quarter.”
You can download and view all of the latest financial results below, alongside our 2022 Annual Integrated Report.